Audi will top luxury car mkt in 6 yrs
Posted on September 26, 2010 | Author: Chanchal Pal Chauhan | View 500
THE Audi groups global sales of 9.5 lakh cars last year helped it clock 29.8 billion turnover,making it one of the most profitable companies in the worlds luxury automotive market.With five manufacturing locations,Audi is active in over 100 markets worldwide,and competes with Mercedes-Benz and BMW globally as well as in India.The company hopes to overtake its German peers by 2016.Michael Perschke,who steers the companys India operations,says the company will target younger customers to boost sales.First-generation entrepreneurs,politicians,Bollywood stars and cricket icons feature in this list.
We cannot sit idle when Indian customers aspire to buy top-end luxury cars.There is a lot more to be accomplished in sales and brand satisfaction, says the 42-year-old German.Perschke,who drives an SUV himself,knows the pulse of the Indian market having worked with Mercedes-Benz India for a few years before joining the Volkswagen group in 2004.
The Audi group plans to invest 5.5 billion mainly in new products to maintain its lead in technology,enshrined in the slogan Vorsprung durch Technik.The philosophy has helped Audi sell 1,876 cars during January-August this year,surpassing total sales of 1,658 cars last year.Having successfully surpassed last years annual sales,we are confident of taking our sales to new highs,leveraging on the growing demand for luxury cars from Indian consumers, he said.
With developed economies yet to fully come out of the woods,luxury carmakers are increasingly looking at emerging markets like India to shore up revenues and improve profitability.Audi is no exception.
The company has started assembling Q5,the compact crossover SUV,at Aurangabad (Maharashtra).The plants capacity has been ramped up to make up to 1,500 SUVs per year for the Indian market.The A4 and A6 sedans are already being assembled in the country.
Audi does not have the first-mover advantage : it was the last to enter Indian luxury car market in 2007,after Mercedes began its journey in 1995 and BMW in 2006.Together,these companies sell around 11,000 cars a year.But the company hopes to catch up,leveraging on the rising demand in the buoyant Indian economy,as demand for cars is fast outstripping supplies,forcing carmakers to add capacities in the worlds second-fastest growing market.
We are looking at increasing our market share as well as focusing on profitability.By next year,we are targeting about 30% share of the Indian market.We expect a huge growth from the metros as well as tier-II cities.So,more showrooms are on the anvil in cities such as Surat,Lucknow,Ludhiana,Indore and Coimbatore, he said.
The company claims it has customised its cars for long-distance driving on Indian roads.It has also been expanding its service network and opened half a dozen new outlets this year.It is also establishing second facilities in bigger cities such as Delhi and Mumbai,the largest markets for such cars.Dealers,who are reaping profits,are being asked to reinvest into the business.This is fair enough as they have worked hard to build the brand and a credible base of customers.Sales can be created,but it may at times damage the brand.We are not in a rush and would cushion our partners (read: dealers) sentiments and maintain our brand lineage, he said.
The Audi India strategy encompasses substantial investment in branding,marketing,exclusive dealerships and after-sales service for the coming years.We plan to increase the dealer network in India from 10 to 18 this fiscal year and launch the next generation of topend saloon models like the A8 by the end of this year that would have a host of features like a standard Google map not available in competing models, he said.
Audi plans to introduce its entire product line from across the world here in India as it reckons the domestic market has the potential to grow as large as the European market.A wider choice helps as customers here have also become discerning.Europe,of course,is far ahead in terms of service partners: there are over 3,000 of them.In India,the plan is to develop at least 50 partners in the medium term to leverage the brand strength.
Mr Perschke aims to make Audi the Oberoi of the Indian auto market.We want to combine luxury with lifestyle,and may be by 2015,the market may shift and our top-of-the-line A8 sedan could become our bestseller in India.Today,the companys bestseller is the mid-size A6 sedan that competes with the Mercedes-Benz E-Class and the BMW 5-Series.
Michalel Percshke, Country Head, India operations